For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.

Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.

The February reporting season in Australia has quite unexpectedly provided investors with a lot to think about. And we're only one week into the season.

Wall Street is correcting, pushing local equities into a whirlwind of day-to-day volatility. Against this background, stockbroking analysts seem busier than usual in issuing upgrades and downgrades for ASX-listed entities. Let's not forget the corporate results releases, which is why February carries the tag of reporting season.

For the week ending Friday, 9th February 2018, FNArena registered no less than 21 upgrades in broker recommendations and 18 downgrades. National Australia Bank was the sole recipient of two upgrades, while on the negative side, Carsales was downgraded three times following its interim report (only once to Sell), while AGL Energy's market update attracted two downgrades, as did James Hardie.

If investors draw from this the conclusion that local reporting season has been more of a mixed bag thus far, despite robust expectations, they are correct.

But then Carsales reported too, as did AGL Energy, Amaysim (update), Ardent Leisure, Greencross (update), James Hardie, Medibank Private, Mirvac and Rhipe; and they were all downgraded.

In case you are somewhat confused, both Ardent Leisure and Mirvac were upgraded and downgraded post result/update.

In terms of price targets, both Speedcast International (new contract) and James Hardie (profit result) enjoyed a gain in double digit percentage, with things remaining rather benign otherwise. Average gains are noticeably larger than negative adjustments for the week.

Queensland based quarry operator Wagners and Viva Energy REIT took the largest hits (-7%), followed by AGL Energy and Tabcorp.

Positive revisions to earnings forecasts continue to be dominated by resources stocks but the week's number one position was reserved for renewable energy company Infigen Energy, with the real fireworks showing up on the negative side. Ardent Leisure, Alacer Gold and Independence Group all suffered dramatic falls in EPS estimates, while Class, Wesfarmers, Village Roadshow, Mineral Resources and CommBank saw analysts paring back expectations. In most cases, this reflects a negative re-adjustment post results release.

The local reporting season shifts up to a higher gear in the week ahead.

Upgrade

ARDENT LEISURE GROUP ((AAD)) Upgrade to Buy from Sell by Citi .B/H/S: 2/3/1

Having stuck with a Sell rating for the past twelve months, Citi has now double-whammy upgraded to Buy. The immediate trigger that led to the change in view is because operating momentum for both Main Event and Theme Parks is improving.

In addition, point out the analysts, US tax cuts should also add to bottom line improvement. Target price jumps to $2.40 from $1.50.

Note: H1 core net profits are anticipated to come out as a loss of -$2.2m.

2017 results exceeded guidance. As revenue growth and earnings improvement is constrained in the three divisions under review, Macquarie believes any divestments could create grounds for a positive surprise and upgrades to Outperform from Neutral.

The broker adjusts earnings per share estimates down by -7.8% in 2018 and -3.1% in 2019 to reflect changes to methodology. Target is raised to $5.65 from $5.50.

UBS reviews forecasts ahead of the first half result next week. The broker envisages some tailwinds are set to boost earnings over the short to medium term.

These include the persistence of robust industrial growth, raw material price deflation into the second half and a decline in the USD/EUR rate.

While the broker is cautious about the ability to generate consistent organic growth over the longer term, current conditions are too compelling to ignore and the rating is upgraded to Neutral from Sell. Target is raised to $26 from $21.

First half results were slightly ahead of Credit Suisse and FY18 guidance has been reconfirmed. The broker observes a solid start to the year in leasing activity. Portfolio occupancy has increased to 94.4%.